Make Lousy Crowbars
Cynthia A. Beltz
For most of its history the United States has maintained an open-door policy on foreign investment, based on the philosophy that it promotes domestic economic growth. 1 Even those hailed as visionary leaders by today's managed traders have pointed to the positive economic role that foreign investment plays in the economy. Alexander Hamilton, for example, argued in his Report on Manufacturers that foreign investment, "rather than be judged a rival, ought to be considered an auxiliary all the more precious because it permits an increased amount of productive labor and useful enterprise to be set to work." 2 On the free-trade side of the fence, the Reagan administration set forth U.S. policy as one that "provides foreign investors fair, equitable,, and nondiscriminatory treatment under our laws and regulations." 3 As President George Bush put it, "unhindered international investment" is "beneficial to all nations; it is a positive-sum game." 4
This open door on investment, unlike trade under the GATT, is not anchored by a single text but rather by a series of bilateral, regional, and multilateral agreements. In particular, U.S. treaties of Friendship, Commerce, and Navigation (FCNs) and more recently the Bilateral Investment Treaties (BITs) have promoted treatment of foreign investors that is no less favorable than that accorded domestic investors (national treatment) and the elimination of performance requirements as a condition of establishment and expansion. 5 The purpose is not only to protect the right of U.S. investors to be treated fairly around the world but also to build a body of practice supporting predictable and nondiscriminatory rules that will protect the rights of investors from all countries.
A major challenge to this objective, ironically, comes from the United States itself. A new generation of laws and propositions that has